Royal Decree No. 15 regarding the temporary suspension of enforcement measures and other measures in favour of companies during the COVID-19 crisis
Many companies are facing a cash shortfall as a result of the COVID-19 crisis. How to protect their business’s continuity?
The judicial reorganisation procedure and the payment obligation suspension that it provides for (Book XX Code of Economic Law – CEL) is currently not regarded by the authorities to be an appropriate rescue measure because, firstly, it would overload the Companies Court during this period of crisis and, secondly, because the suspension applies only to ”old” debts that existed prior to the initiation of the procedure.
Consequently, the government has temporarily organised a moratorium, (or a ’ceasefire’) in order to protect any company in debt as a result of the Covid-19 crisis, which is in need of liquidity, against either precautionary or executory attachment proceedings, and against any bankruptcy or judicial settlement.
Royal Decree No 15 foresees four temporary suspension measures covering the period from 24 April 2020 to 17 May 2020 (subject to possible extension):
- Impossibility of initiating or pursuing enforcement measures as well as precautionary or executory attachment measures
EXCEPTION: precautionary and enforceable attachment of real property (as well as precautionary attachment of seagoing and inland waterway vessels) remain possible.
- No bankruptcy filing on summons or judicial resolution is possible
EXCEPTION: Possibility of filing a bankruptcy petition or an admission of bankruptcy on the claim by the Public Prosecutor’s Office or of a provisional administrator.
- Extension of payment terms within the framework of a previously approved reorganization plan
- Prohibition of unilateral or judicial termination of agreements concluded before 24 April 2020 for failure to pay a due and payable debt
EXCEPTION: employment contracts.
It is worth pointing out that such a system of legal suspension does not in any way affect the obligation as regards the payment of one’s debts, whether regarding principal, interest or indemnities. It is therefore in the interest of each company to respect the payments as far as possible, because following the moratorium, interest and damages can be claimed by the creditor.
To prevent certain companies from benefiting unduly from such protection, the creditor is given the possibility of summoning the debtor before the president of the Companies Court to request the withdrawal of this suspension. The President of the Companies Court, ruling as in summary proceedings, will assess whether the debtor has truly been affected by the Covid-19 crisis and subsequent measures, also taking into account the impact of the suspension with respect to the creditor’s interests so as to avoid a cascading (or ‘domino’) effect.
Furthermore, there is also a temporary suspension of the obligation to file a bankruptcy petition, if the conditions are met because of the COVID-19 pandemic and its consequences.
Lastly, the legislator intends to stimulate granting of credit, whether by a bank or by a supplier by, on the one hand, protecting new credits and, on the other hand, by lightening the potential liability of those who provide such credits. A renegotiated credit is not regarded as a new credit.
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Consequences of the United Kingdom’s withdrawal from the European Union n° 4: the ‘Future Partnership’ negotiations
20 April 2020
The substance of the future relationship is now the principal focus of the discussions between the United Kingdom (UK) and the European Union (EU). The UK Government has made clear that, following conclusion of the Withdrawal Agreement, it considers its right to diverge from EU law and policies in future as part of its vital national interest. For its part the EU has emphasised the need for a level playing field and so called ‘dynamic alignment’ in areas that include labour law, environmental regulation and state aid.
Second round of FTA negotiations from Monday 20 April to Friday 24 April 2020
Michel Barnier, the European Commission’s Chief Negotiator, and David Frost, the UK’s Chief Negotiator, agreed to hold the second round of negotiations (postponed by almost a month from 18 March) this week. A repercussion of current travel and meeting restrictions to control the spread of the Covid-19 virus is that the negotiations will be held via video conference.
Timetable of this week’s negotiations
After the 20 April plenary session, from Tuesday 21 through Thursday 23 April there will be parallel sessions on trade in goods, trade in services and investment and on a level playing field for open and fair competition – with a relatively short political meeting, between the chief negotiators, scheduled for Friday morning. Other, shorter, parallel sessions will also take place including on fisheries, transport (aviation), transport (roads), law enforcement and judicial cooperation in criminal matters, energy (including civil nuclear cooperation), mobility and social security coordination and participation in EU programmes.
Future negotiation rounds
Two future negotiation rounds are scheduled for the weeks beginning 11 May and 1 June 2020. That leaves very little formal negotiating time before the high-level meeting to review progress scheduled for June. Under Article 132 Withdrawal Agreement (WA), the Joint Committee, established by Article 164 to oversee implementation, application and interpretation of the WA, can adopt ‘a single decision extending the transition period for up to 1 or 2 years’ before 1 July 2020. The transition period is due to end on 31 December 2020.
A possible extension of the transition period?
It will be politically difficult for the UK Government to extend what it refers to as the implementation period [for withdrawal] beyond the end of this year. Following the December 2019 general election the Conservative Party’s pledged that: “We will negotiate a trade agreement next year – one that will strengthen our [UK] Union – and we will not extend the implementation period beyond December 2020”. That pledge is enshrined in law in section 33 of the European Union (Withdrawal Agreement) Act 2020 (EU(WA)A). Although, section 41 EU(WA)A does provide a UK Government Minister with the authority to modify section 33.
Possible impact of Covid-19 on the transition period?
The Covid-19 crisis, unforeseen in both the UK and the EU in December 2019, has negatively affected economies worldwide and any joint decision on whether to extend the transition/implementation period will now be taken against that background. No negotiated deal remains a possible outcome. However, the risk is that persisting with the political deadline for ending transition/implementation will only add to the dislocation already caused by Covid-19.
Disclaimer: This general memorandum may not deal with every important topic or cover all important aspects of the subject matter. It is not intended, and should not be used, as a substitute for seeking appropriate legal advice on specific questions.
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Consequences of the United Kingdom’s withdrawal from the European Union n° 4: the ‘Future Partnership’ negotiations
20 April 2020
The substance of the future relationship is now the principal focus of the discussions between the United Kingdom (UK) and the European Union (EU). The UK Government has made clear that, following conclusion of the Withdrawal Agreement, it considers its right to diverge from EU law and policies in future as part of its vital national interest. For its part the EU has emphasised the need for a level playing field and so called ‘dynamic alignment’ in areas that include labour law, environmental regulation and state aid.
Second round of FTA negotiations from Monday 20 April to Friday 24 April 2020
Michel Barnier, the European Commission’s Chief Negotiator, and David Frost, the UK’s Chief Negotiator, agreed to hold the second round of negotiations (postponed by almost a month from 18 March) this week. A repercussion of current travel and meeting restrictions to control the spread of the Covid-19 virus is that the negotiations will be held via video conference.
Timetable of this week’s negotiations
After the 20 April plenary session, from Tuesday 21 through Thursday 23 April there will be parallel sessions on trade in goods, trade in services and investment and on a level playing field for open and fair competition – with a relatively short political meeting, between the chief negotiators, scheduled for Friday morning. Other, shorter, parallel sessions will also take place including on fisheries, transport (aviation), transport (roads), law enforcement and judicial cooperation in criminal matters, energy (including civil nuclear cooperation), mobility and social security coordination and participation in EU programmes.
Future negotiation rounds
Two future negotiation rounds are scheduled for the weeks beginning 11 May and 1 June 2020. That leaves very little formal negotiating time before the high-level meeting to review progress scheduled for June. Under Article 132 Withdrawal Agreement (WA), the Joint Committee, established by Article 164 to oversee implementation, application and interpretation of the WA, can adopt ‘a single decision extending the transition period for up to 1 or 2 years’ before 1 July 2020. The transition period is due to end on 31 December 2020.
A possible extension of the transition period?
It will be politically difficult for the UK Government to extend what it refers to as the implementation period [for withdrawal] beyond the end of this year. Following the December 2019 general election the Conservative Party’s pledged that: “We will negotiate a trade agreement next year – one that will strengthen our [UK] Union – and we will not extend the implementation period beyond December 2020”. That pledge is enshrined in law in section 33 of the European Union (Withdrawal Agreement) Act 2020 (EU(WA)A). Although, section 41 EU(WA)A does provide a UK Government Minister with the authority to modify section 33.
Possible impact of Covid-19 on the transition period?
The Covid-19 crisis, unforeseen in both the UK and the EU in December 2019, has negatively affected economies worldwide and any joint decision on whether to extend the transition/implementation period will now be taken against that background. No negotiated deal remains a possible outcome. However, the risk is that persisting with the political deadline for ending transition/implementation will only add to the dislocation already caused by Covid-19.
Disclaimer: This general memorandum may not deal with every important topic or cover all important aspects of the subject matter. It is not intended, and should not be used, as a substitute for seeking appropriate legal advice on specific questions.
CONSEQUENCES OF THE UNITED KINGDOM’S WITHDRAWAL FROM THE EUROPEAN UNION N° 3: TRADE MARKS
The United Kingdom (UK) left the European Union (EU) on 31 January 2020 and it entered a post-withdrawal transition period that lasts until 31 December 2020. During the transition period nothing should change regarding the administration of EU Trade Marks (EUTMs). The situation becomes more fragmented in 2021, after the transition period, and some uncertainties currently remain about necessary reforms to UK trade mark law and regulations.
Transition Period: Statements from the UK Intellectual Property Office (UKIPO) (29 January 2020, last up-dated 31 January 2020)
“The UK will remain part of the EU trade mark system throughout the transition period that ends on 31 December 2020”. EUTM “will continue to extend to the UK during this time”.
“We will not create comparable UK trade mark rights on 31 January 2020. These rights will be created at the end of the transition period under the terms of the Withdrawal Agreement”.
“Businesses, organisations or individuals that have applications for an EUTM which are ongoing at the end of the transition period will have a period of nine months from the end of the transition period to apply in the UK for the same protections”. (Our emphases.)
Transition Period: Statements from the EU Intellectual Property Office (EUIPO) (29 January 2020)
The continued application of the EU Trade Mark (EUTM) Regulations during the transition period includes, in particular, “all substantive and procedural provisions as well as the rules concerning representation in proceedings before the EUIPO”.
“In consequence, all [EUIPO] proceedings that involve grounds of refusal pertaining to the territory of the UK, earlier rights originating from the UK, or parties/representatives domiciled in the UK will run as they did previously, until the end of the transition period ”.
(Our emphases.)
UK trade marks from 1 January 2021 (from UKIPO Guidance as at 30 January 2020)
From the 1 January 2021, EUTMs will no longer protect trade marks in the UK. But in accordance with Articles 54 and 55 of the Withdrawal Agreement, the UKIPO will create a comparable UK trade mark, free of charge, for all right holders with an existing EU trade mark. (UKIPO assesses it will need to convert almost 1.4 million EU trade marks and provide equivalent UK trade marks at the end of the transition period.)
If you have a pending EUTM application, you will be able to apply to register a comparable UK trade mark in the 9 months after 1 January 2021 subject to paying the usual UK registration fees of £170, which includes one class of goods or services, and an extra £50 for each additional class of goods or services. (The earlier filing date of the pending EUTM will be kept.)
International registrations designating the EU from 1 January 2021
On 1 January 2021, (Madrid System) international trade mark registrations designating the EU will no longer be valid in the UK. In accordance with the Withdrawal Agreement Article 56, the UKIPO and WIPO are discussing options to ensure that rights holders do not lose protection in the UK on 1 January 2021 for their internationally protected EU trade mark registrations.
In addition, amendments to the UK Trade Marks Act 1994, to the UK Trade Marks Rules 2008, (and to other amending and standalone regulations), will be required to reflect the fact that, the UK will no longer be part of the EU trade mark system after 1 January 2021.
Disclaimer: This general memorandum may not deal with every important topic or cover all important aspects of the subject matter. It is not intended, and should not be used, as a substitute for seeking appropriate legal advice on specific questions.
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CONSEQUENCES OF THE UNITED KINGDOM’S WITHDRAWAL FROM THE EUROPEAN UNION: N° 2 DATA PROTECTION
The United Kingdom (UK) left the European Union (EU) on 31 January and it entered a post-withdrawal transition period.
Statement from the UK Information Commissioner’s Office (ICO) (29 January 2020)
“During [the transition] period, which runs until the end of December 2020, it will be business as usual for data protection”. (Our emphasis)
“The GDPR will continue to apply”. (…)
The UK continues to be considered an EU Member state during the transition period
For (most) legal purposes the UK will continue to be considered as an EU Member State until the end of the transition period (31 December 2020). Withdrawal Agreement (WA) Article 127 6. states:
“Unless otherwise provided in this Agreement, during the transition period, any reference to Member States in the Union law applicable” (…), “shall be understood as including the United Kingdom”. (Our emphasis.)
The Withdrawal Agreement
The WA is an International Treaty. It is intended to be attended by legal consequences and to be enforceable. Title VII WA (Articles 70 to 74), specifically concerns Data and Information.
The effect of WA Article 71(1)(a) is that the rules of the GDPR continue to apply for personal data transfers between the European Economic Area (the EEA is the EU plus Iceland, Liechtenstein and Norway) and the UK as from 1 February 2019. Thereafter, WA Article 71(2) appears to assume that during the transition period a finding of ‘adequacy’ will be made in respect of the United Kingdom’s data protection regime.
‘Adequacy’ is important
The general rule (under Chapter V of the GDPR), is that controllers and processors cannot transfer personal data outside the EEA to ‘third-countries’ (such as the UK) unless adequate levels of data protection can be ensured. In the absence of a general finding of adequacy in respect of a third country contractual methods need to be used to enable such transfers.
ICO’s statement acknowledges the potential for uncertainty
“It is not yet known what the data protection landscape will look like at the end of the transition period and we recognise that businesses and organisations will have concerns about the flow of personal data in future”.
“We will continue to monitor the situation and update our external guidance accordingly”.
More information available from: ICO’s Brexit related guidance and resources
Read MoreCONSEQUENCES OF THE UNITED KINGDOM’S WITHDRAWAL FROM THE EUROPEAN UNION: N° 1 THE BRITISH JUDGES
Intention to leave the EU
The United Kingdom of Great Britain and Northern Ireland (“UK”) notified the European Council that it intended to withdraw from the European Union (“EU”) by a letter of 29 March 2017 in accordance with the procedure set out in Article 50 of the Treaty of European Union.
Withdrawal
Following ratification of the Withdrawal Agreement, withdrawal formally took place with effect from midnight Central European Time (“CET”) which was 23:00 in London (Western European Time “WET”) on Friday 31st January 2020.
Transitional period
The United Kingdom is no longer a Member State of the EU as of 1 February 2020. However, a transitional period, agreed as part of the Withdrawal Agreement, will last until 31 December 2020. (Although in principle the UK government could request an extension of the transitional period, it has legislated to the effect that it will not do so.).
Institutional implications
From 1 February and throughout the transitional period, the UK will no longer be represented in the EU institutions including the European Parliament and the Council of Ministers. As a third country the UK will no longer participate in the EU’s decision-making processes.
Mandates of the British Judges of the European Courts ends
On 31st January, the Court of Justice (“CJEU”) took formal notice that the effect of the withdrawal of the UK from the EU was to bring to an end the mandates of the British Judges (at both the General Court and the CJEU) with effect from midnight.
However, the United Kingdom continues to be considered an EU Member state during transition
On the other hand, the transition period foreseen by the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union, of October 2019, and in particular Article 127 6. thereof, provides that for (most) legal purposes the United Kingdom will continue to be considered as an EU Member State until the end of the transition period (31st December 2020):
Article 127 6. “Unless otherwise provided in this Agreement, during the transition period, any reference to Member States in the Union law applicable” (…), “shall be understood as including the United Kingdom”. (Emphasis added.)
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63rd UIA Congress Luxembourg
At the UIA Annual Congress in Luxembourg, Len HAWKES (FLINN) gave two presentations: the first for the Robotics and AI Commission, the second for the Commission on Privacy and Rights of the Digital Person.
In the Robotics session, on Friday, November 8th, Len’s presentation was titled: ‘What work is ICO Preparing on Artificial Intelligence & Why?’ The presentation examined the work of the UK Information Commissioner’s Office under three headings: i) the Project ExplAIn initiative, ii) the proposed AI auditing framework and iii) Data Analytics and Political campaigns. Other speakers were: Grant DAVIS-DENNY, Munger, Tolles & Olson LLP, Los Angeles; Jérémy BENSOUSSAN and Alain BENSOUSSAN of Lexing Alain Bensoussan Avocats, Paris.
For the Privacy Commission, on Saturday morning, November 9th, Len gave an up-date on GDPR and Brexit based on two possible scenarios a) ratification of the Withdrawal Agreement and implementation of the Political Declaration; and b) No Deal (which is still a possibility in certain circumstances). Other speakers were: Grant DAVIS-DENNY, Munger, Tolles & Olson LLP, Los Angeles, USA; Eliana A. Silva de Moraes, Sao Paulo, Brazil; Elisabeth Thole, Van Doorne N.V., Amsterdam, the Netherlands; Pradeep KODIYATH PATINHARE, Poduval Legal, Kochi, India.
The slides for Len’s two presentations are available below :
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GDPR ISSUES IN THE M&A PROCESS: 14TH International M&A CONFERENCE – VERSAILLES
M&A practitioners are more and more confronted by GDPR issues when assisting their clients. This matter was addressed by FLINN during the 14th International M&A Conference, which took place from 1 to 3 November in the prestigious TRIANON PALACE hotel in Versailles.
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The GTDT Practice Guides – Franchise has been published!
FLINN lawyers, Leonard Hawkes and Benoit Simpelaere, have contributed on part 5: Other Legal Considerations, Electronic Commerce, Social Media and Franchising to the published Practice Guides: Franchise 2019.
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‘To be, or not to be’ … Brexit, Act III (with apologies to William Shakespeare)
Scene 1: The risk profile of key border-related systems
On February 28, the House of Commons Public Accounts Committee issued a statement that it had published as evidence, a National Audit Office memorandum, “The UK border: preparedness for EU exit update”.
Commenting on the memorandum the Committee Chair, Meg Hillier (Labour, Hackney South and Shoreditch) said:
“The NAO’s memorandum shows that with the clock ticking down there remain serious questions about whether the UK will be prepared at the border if there is ‘no deal’ and what this would mean for individuals and businesses.
It is alarming that six of the eight critical IT systems needed are in danger of not being ready in time and that government assesses readiness of traders as one of its most significant risks”.
The Public Accounts Committee will be pressing for answers on preparations for EU exit this week.
Scene 2: Summary of Specific Negotiating Objectives ~ United States – United Kingdom negotiations
On February 28, the Office of the U.S. Trade Representative submitted to Congress and released a summary of the Trump administration’s specific negotiating objectives for a United States-United Kingdom trade agreement.
The summary document consists of brief bullet point objectives.
Agricultural goods, the US objective is to secure: … ‘comprehensive market access for U.S. agricultural goods in the UK by reducing or eliminating tariffs’;
On the other hand, the agreement should provide for: … ‘reasonable adjustment periods for U.S. import-sensitive agricultural products, engaging in close consultation with Congress on such products before initiating tariff reduction negotiations’. (Emphasis added.)
Sanitary and Phytosanitary Measures (SPS):
Establish a mechanism to quickly remove unwarranted barriers that block the export of U.S. food and agricultural products in order to ‘obtain more open, equitable, and reciprocal market access’.
‘Include strong provisions on transparency and public consultation that require the UK to publish drafts of regulations, allow stakeholders in other countries to provide comments on those drafts, and require authorities to address significant issues raised by stakeholders and explain how the final measure achieves the stated objectives’. (Emphasis added.)
National Farmers’ Union (‘NFU’) President, Minette Batters, said:
“The NFU has been very clear on this point. It is imperative that any future trade deals, including a possible deal with the USA, do not allow the imports of food produced to lower standards than those required of British farmers”.
“British people value and demand the high standards of animal welfare, environmental protection and food safety that our own farmers adhere to. These world-leading standards must not be sacrificed in the pursuit of reaching rushed trade deals. We should not accept trade deals which allow food to be imported into this country produced in ways which would be illegal here”. (Emphasis added.)
Scene 3: The Attorney General’s ‘fig-leaf’
The so called “backstop” provision in the Withdrawal Agreement is intended to avoid the return of a hard border between Ireland (an EU member state) and Northern Ireland. It has become a sticking point regarding approval of the UK Government’s Withdrawal Agreement and is fiercely opposed by the so called ‘Brexiteers’ and the Democratic Unionist Party in Northern Ireland.
At the time of writing (March 4) various recent reports, in the national and international press (Times, Telegraph, Reuters), suggest that the Attorney General, Geoffrey Cox, instead of trying to introduce either a hard time-limit or unilateral exit mechanism regarding the backstop, is trying to secure an arbitration mechanism that would allow Britain or the European Union to provide formal notice that the backstop should come to an end. Reportedly, the EU is resisting demands for such a mechanism, which would fall outside the Court of Justice of the European Union’s (CJEU) jurisdiction and authority to resolve EU law disputes. (See Article 19, Treaty on European Union; Articles 267 and 344 Treaty on the Functioning of the European Union; and the Judgment of the CJEU in Case C‑284/16, Achmea, of 6 March 2018.)
The issues summarised above, taken overall, only show a small part of the complexity of exiting the EU. They indicate that a delay beyond the current March 29th deadline looks sensible. Further, we can suggest that arguments in favour of a second referendum (that would ask if the reality of this Brexit is what was voted for), look much stronger …
(…) ‘For who would bear the whips and scorns of time,
The oppressor’s wrong, the proud man’s contumely,
The pangs of despised love, the law’s delay,
The insolence of office and the spurns
that patient merit of the unworthy takes,
When If he himself might [be permitted] his quietus [to] make’,
Or, is there really a concern that … ‘the native hue of resolution’ will be ‘sicklied o’er with the pale cast of thought’, … ?
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